Tax nanny for white business: a new concept of education from lawmakers

We have already told you that the Tax Committee has drafted a bill on the White Business Club. The text of this document has already been registered on the website of the Verkhovna Rada under No. 11084.

So let's find out who the white business is and what benefits it will receive from the government.

MPs propose to introduce special tax administration during martial law for taxpayers with a high level of voluntary compliance with tax laws.

Who will receive the title of a taxpayer with a high level of voluntary compliance with tax laws? Danylo Hetmantsev, Chairman of the Tax Committee, called this category the "White Business Club".

So, welcome to this club if you meet the following requirements

a) no tax debt and/or arrears in the payment of the unified social contribution or the total amount of debt does not exceed one hundred and eighty tax-free minimum incomes (UAH 3,060)

b) the absence of uncoordinated tax (monetary) liabilities under tax assessment notices for which the amount of monetary liabilities or VAT reduction claimed for budget refund exceeds 3000 non-taxable minimum incomes (UAH 51,000) based on the results of documentary checks;

c) absence of facts of violation of tax obligations to submit reports and/or documents (notifications), including those provided for in Articles 39 and 39-2, paragraph 46.2 of Article 46 of this Code, by the taxpayer;

d) absence of tax notifications-decisions on violation of the deadlines for settlements under export and import operations during the year;

e) absence of a decision on the taxpayer's compliance with the criteria of riskiness of the value added tax payer, in accordance with the procedure and on the grounds determined by the Cabinet of Ministers of Ukraine in accordance with paragraph 201.16 of Article 201 of this Code;

e) absence of a decision on the application of special economic and other restrictive measures (sanctions) to the taxpayer, in accordance with the procedure established by the Law of Ukraine "On Sanctions";

f) compliance with the criteria set out in sub-clause 69.41.2 of this clause depending on the chosen taxation system.

These are general criteria that apply to legal entities and individual entrepreneurs. In addition, additional criteria are proposed depending on the taxation system. Thus, legal entities on the general taxation system will be included in the White Business Club if they simultaneously meet the following additional criteria

a) the level of corporate income tax payment is equal to/higher than the industry average;

b) the level of VAT payment is equal to/higher than the industry average (except for taxpayers whose share of exports in total supplies is equal to or exceeds 25%);

c) accrual and/or payment of income in the form of wages by a tax agent - a legal entity for the last two reporting (tax) periods is made at the level not less than the average wage in the relevant industry in the relevant region (at the main place of registration with the territorial body of the central executive body implementing the state tax policy), multiplied by the coefficient 1.1, provided that the average monthly number of employees for the last 12 months is not less than five people.

The following criteria are also provided for legal entities that are single tax payers of the third group :

a) the level of tax payments to the consolidated budget is equal to/higher than the industry average;

b) accrual and/or payment of income in the form of wages by a tax agent - a legal entity for the last two reporting (tax) periods is made at the level not less than the average wage in the relevant industry in the relevant region (at the main place of registration with the territorial body of the central executive body implementing the state tax policy), multiplied by a coefficient of 1.1, provided that the average monthly number of employees for the last 12 months is at least five people.

In turn, for legal entities of the fourth group of single taxpayers

a) the level of taxes paid to the consolidated budget per 1 hectare is equal to/higher than the national average;

b) accrual and/or payment of income in the form of wages by the tax agent - legal entity for the last two reporting (tax) periods is carried out at the level of not less than the average wage in the relevant industry in the relevant region (at the main place of registration with the territorial body of the central executive body implementing the state tax policy), multiplied by the coefficient 1.1, provided that the average monthly number of employees for the last 12 months is not less than five people.

c) the area of leased land plots owned (on the right of ownership/use) by the taxpayer is at least 500 hectares inclusive or leased land plots of communal and/or state ownership is at least 0.5 hectares (as of January 1 of the current year), declared before February 20 of the current year and for which the amount of the land tax liability was paid within the time limits provided for by law, or a taxpayer under the simplified taxation system of the fourth group paid the single tax liability in full and within the time limits provided for by law.

For sole proprietors on the general taxation system, an additional pass to the White Business Club is required if:

a) the level of tax liabilities on personal income tax from business activities and the level of payment of value added tax is equal to/higher than the industry average;

b) the accrual and/or payment of income in the form of wages by a tax agent - individual entrepreneur for the last two reporting (tax) periods is not less than the average wage in the relevant industry in the relevant region (at the main place of registration with the territorial body of the central executive body implementing the state tax policy), multiplied by a coefficient of 1.1.

Sole proprietors of thethird group must also meet the following criteria:

a) the declared amount of income for the tax (reporting) period is more than UAH 5 million and the level of tax payments to the consolidated budget is equal to/higher than the industry average;

b) the accrual and/or payment of income in the form of wages by a tax agent - an individual entrepreneur for the last two reporting (tax) periods is at least the average wage in the relevant industry in the relevant region (at the main place of registration with the territorial body of the central executive body that implements the state tax policy), multiplied by a coefficient of 1.1.

What do the MPs propose to those lucky taxpayers who are called taxpayers with a high level of voluntary compliance with tax legislation?

a) a moratorium on documentary audits, except for certain types;

b) reduction of the timeframe for desk and documentary audits for the purposes of budgetary reimbursement to 5 calendar days;

c) individual tax consultations within 5 calendar days;

d) the taxpayer will be assigned a compliance manager (the so-called "tax nanny") with whom the taxpayer will be able to interact, in particular, using remote communication means, including videoconferencing;

e) upon request, the taxpayer has the right to receive information on tax information available to the supervisory authority that may indicate tax risks in the taxpayer's activities, as well as advice on how to eliminate such risks within five days.

The taxpayer will receive information about joining the White Business Club and the contact details of its compliance manager from the State Tax Service in its electronic cabinet.

The Council believes that the adoption of the draft law will facilitate the establishment of partnerships between taxpayers and the supervisory authority, as well as ensure social justice in the settlement of tax relations.

Buhgalter 911 notes that the content of the author's materials may not coincide with the policy and opinion of the editorial team. The authors of the published materials include not only representatives of the editorial team.

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